lots of people use Box.net and Fileden for hosting. Google used to work for hosting, but I believe they disabled that.

Buying the upgrade won't change which players you're allowed to use in your sidebar. I can't actually think of any off the top of my head. Odeo, Soundcloud, and the WordPress audio player work within posts. Soundcloud might work in sidebars, bt I haven't tried it.

1. As raincoaster says, you don't need the space upgrade in order to have music in your blog: you can upload the mp3s in Fileden. Just make sure you get their direct URLs.

2. For players (yes, plural) that work in the sidebar, you can go to MyFlashFetish. If you use the post-to-Wordpress button, you'll get a post with the player in it: you switch to html, copy the code (as it is or modifying it) and paste it in a text widget.

Yea basicly most audio players will work in the actual post (then again I might as well put a whole youtube clip instead). Soundcloud did work actually (thanks), but it's too big and bulky to put in the sidebar, and somehow the streaming is very choppy...

Thanks Panaghiotisadam (the name!),
Found a player off that myflashfetish website that's nice and small, though its a bit long and sticks out the side of the sidebar. I changed the size (visability), but it jist cuts off the end, I thought it would kinda shrink...hm

Yea, it's ok for now, I cut it so small, now it seems like a playbutton only, I was just slightly bummed that the right edge gut cut off, but it's the best one so far and actually the sound is really good (whats most important), till I find something better, I'll stick with this.
Anyways, thank you for you help, as always you give good ideas!
@Raincoaster, thanks for the help too.

Ah, sorry to bother with questions again, I was just browsing your site (lots of handy tips I must say) and came across this article you wrote about youtube video's and resizing them, is there by any chance a possibility to have a youtube clip in the sidebar?